Learning how to setup an Ethereum Wallet outside of a centralized exchange, like Coinbase, is important for any person wanting to invest more into the Cryptocurrency space. Centralized exchanges carry a heavy risk – your assets can get frozen, lost and mainly controlled by the Government.
In addition you are limited to holding simple currencies – like Bitcoin, Ethereum and Litecoin in Coinbase for instance. You aren’t able to interact with any contracts on the Ethereum network or do anything besides have the coins in there.By holding your own wallet, you can use your funds for whatever purpose – for using them in different Ethereum programs, buying/selling your own custom tokens, or participating in an ICO.
So in this tutorial, I’m going to show you
how to setup your own wallet outside of a centralized exchange to one that YOU own
The first thing you want to do to is to set up your own wallet outside of a centralized exchange, like Coinbase. Coinbase is a great service to buy and sell ETH, however, it’s downfall is that it is centralized. This means that if their servers go down or the government sues Coinbase, your funds could be at risk.
Also Read: HOW TO BUY AND SALE BITCOINS
By setting up your own decentralized wallet, you free your assets from being controlled by a third-party – meaning you have 100% control of your assets as they are stored on the blockchain and not a third-party server. There are many ways to do this, however, in this tutorial, I will teach you a simple way to set up a wallet, within minutes, with MyEtherWallet.
First, head to www.MyEtherWallet.com.
You will see a screen like this:
Choose a password, preferably something long with numbers and characters.
A good example of a password would be: V*N^vh7%T3wavZVa
A bad example of a password would be anything with your initials, middle name dogs name or anything that people could potentially guess.
StrongPasswordGenerator can generate a strong password for you.
Make sure you write this password down. If you forget this password, you could lose your wallet (and funds) forever.
Once you’ve put in your password that you’ve written down, click ‘Create New Wallet’.
Next, you’ll get a screen that says ‘Save your Keystore File’. This is your wallet file.
Click ‘Download Keystore File’ and copy this file to multiple locations, such as your Documents folder and an external USB drive.As the warning says on the website, do not share this with anyone. If they know your password and have this file, they can access your funds. This file is for you and for you alone.
Once you’ve downloaded the file, click “I understand. Continue.”
It will take you to a page with what’s called your ‘Private Key’, that looks like this:
Your ‘Private Key’ is another way to access your wallet, without having your ‘Keystore File’ and password.
Do not store this key on your computer.
Rather, click “Print Paper Wallet”, which will print your wallet address with the private key to, you guessed it, a piece of paper. It looks like this:
With this piece of paper, you will be able to access your wallet with the information it provides.
Remember to keep this piece of paper safe – if someone has access to this, they can access your wallet.
Click “Next: Save Your Address” when you’ve got it printed.
You officially now have a wallet that YOU own!! Let’s see what’s inside your wallet…
You should now see a login screen that looks like this:
This is the screen you’ll get any time you try to do something in MyEtherWallet – you’ll have to “unlock” your wallet using either your Keystore file and password or your Private Key that’s on the paper wallet that you just printed out.
You can use either – but for now, select “Keystore File” and select the file that you downloaded onto your computer at the beginning of the wallet creation process.
The name of the file will look something like “UTC–2017-06-25T16-57-01.504Z–243d975bf1f9f9f9f9e9f9ddf360”
Once you select your wallet, enter the password that you used to create the wallet.When you unlock your wallet, your wallet information will appear below, like this:
Your Address is the address of your wallet. You’ll use this address to receive funds, like ETH and custom Ethereum tokens.